Enterprise Structure in SAP S/4HANA is the foundation of the SAP system that defines how an organization is structured. It consists of organizational units such as Company, Company Code, Sales Organization, Plant, and Purchase Organization, enabling efficient management of business processes across finance, sales, and logistics.
Most commonly asked question in SAP FICO interview.
Leader ledger in SAP
Leading ledger is the account books used for group reporting. For example, company has requirement to produce financial books as per IFRS then leading ledger can be used for this. Leading ledger is often 0L provided by sap. Sap recommends using 0L as leading ledger for group reporting. This leading ledger is assigned to each and every company code.
In S4HANA, each ledger can be maintained in maximum 10 currencies (Group currency, Company code currency & 8 additional freely definable currencies) but mostly companies use only two or three currencies at max (Group currency, company code currency and one additional currency).
Non leading ledger in SAP
If other than accounting principle IFRS, company also needs to prepare books in one more accounting law for example local law. Then non-leading ledger is used for local reporting. Hence leading ledger 0L is used for IFRS reporting whereas non-leading ledger is used for other reporting laws. SAP does not provide non-leading ledger by default rather it's created manually as per business reporting requirement. Non -leading ledger can be created for different financial year. It's possible to control period open/ close for non-leading ledger separately from leading ledger.
Leading ledger vs Non-leading ledger in sap
Leading ledger is used for group reporting. Non-leading ledger is used for parallel reporting or local reporting. Number of non-leading ledger depends upon how many different accounting principle company has to report.
It's possible to post document only to one specific ledger and not post to other ledgers.
Business does ledger specific postings mostly at month end or year end.
Non-leading ledger is heavy used in asset accounting because asset depreciation value does depend upon accounting principle.
99% transactions are not ledger dependent and hence post to all ledgers.
Conclusion
Next time you give any SAP FICO interview, expect question on ledger concept. Interviewer checks your conceptual understanding of non-leading ledger.